If you want more power as a project manager, join a project based organisation

Once, one of my project management course participants was whining about the lack of professionalism within their organisation. She was feeling very powerless and miserable. To add to the misery, she had a boss who once in a while bypassed her and allocated work directly to the team members. She felt miserable, and told me that she is looking for a change of job. In fact, she was asking for advice. My reply was spontaneous. If you are looking for more power as a project manager, jump from the current functional organisation to a projectized organisation. Thanks to PMBOK (Project management body of knowledge by PMI, USA), which gave me the formal knowledge about the organisational structures and their impact on project management.

Functional organisation
Most of the manufacturing, services organisations fall into this category. Organisations are divided into key functions, headed by functional managers (VP sales, VP Production, VP Finance, VP HR etc). Project managers report to the functional managers. Projects do not bring in any direct revenue, hence project teams are considered as support teams. If you are the project manager to implement a production planning and control system, then most probably you will be reporting to the VP production. In functional organisations the project manager will have least authority, where as the functional managers will have maximum authority levels.

Projectized or Project based organisation (PBO)
In these organisations, everything is managed as a project. It is the projects which bring in the money for the organisation, hence project teams are considered as the bread winners of the organisation. Other functions support the projects. In project based organisations, the project manager has the maximum authority and the functional managers have least authority.

Matrix organisations
The moment you hear the term 'dotted line reporting', you can be rest assured that you are in a matrix organization. In matrix organisations, the project team members report to more than one person (project manager, functional manager). Matrix organisations are ideal for teams which calls for cross disciplinary  skills sets. Most of the product companies will have matrix organisational structures. Matrix organisations are further divided into;

• Strong matrix
• Weak matrix
• Balanced matrix

  based on the power equations between the project manager and the functional manager.

• In a strong matrix organisation, the project manager will have more authority than the functional manager.
• In a weak matrix organisation, the functional manager will have more authority than the project manager.
• In a balanced matrix, both the project manager and the functional manager shares the same kind of authority levels 

A closer look at the key decision making process within an organisation is the smartest way to understand the organisation's structure.

• If all key decisions are taken by the functional manager, then it must be a functional organisation.
• If all key decisions are taken by the project manager, then it must be a projectized organisation.
• If all key decisions are taken by both the project manager and the functional manager together, then it must be a balanced matrix.
• If all key decisions are taken by the functional manager, after collecting inputs from the project manager, then it must be a weak matrix.
• If all key decisions are taken by the project manager, after collecting inputs from the functional manager, then it must be a strong matrix. 

Understanding the organisational structures and power equations will help us to manage the stakeholder expectations better.

Reference : PMBOK Version 5, Pages 14, 21,22,23,24,25,26